Despite robust predictions for the 2016 holiday shopping season, traditional department stores are continuing their death spiral in the U.S.
Last week, Macy’s announced the closing of 68 stores – three have already closed; 63 will close this spring; and two will close by summer. Additionally, Macy’s plans to close another 30 locations over the next few years.
Understandably, stock prices of all three retailers have plunged, and competitors like J.C. Penney and Nordstrom are feeling the heat as well.
Why? Consumers are comfortable with shopping for and purchasing just about everything online. They expect the myriad of choices, the deep discounts and the quick service that comes with internet shopping. American consumers spent $91.7 billion online during November and December, an increase of 11 percent over the previous holiday season.
Sales transactions on mobile devices increased a whopping 33 percent over last year to $1.2 billion just on Black Friday alone.As expected, Amazon dominated holiday sales with almost 40 percent of all online purchases going to the mega-e-retailer during certain parts of the holiday sales season.
So what is next for brick and mortar department stores? Can they retool and survive? The answer is not without some big changes.The new year will likely see an increase in niche retailers for new and existing brands.
However you look at, e-commerce is only strengthening, so 2017 is poised to be a make or break year when it comes to brick and mortar retail stores in general and department stores in particular.